Deforestation and land clearing causes nearly 20 percent of all global greenhouse gas emissions each year according to the Intergovernmental Panel on Climate Change. This is more than all the emissions from transportation and is second only to emissions from coal-powered energy plants. Avoided deforestation is the concept of reducing carbon emissions by not clearing forests. Avoided deforestation can include public sector policies, such as contributing to funds set up for countries like Brazil that have large areas covered by forests, and private sector market-based mechanisms such as the carbon cap-and-trade system by which carbon credits are sold in return for not clearing the forests.
The aim of avoided deforestation is to protect the forests and biodiversity, thereby reducing carbon emissions, and at the same time stimulate the local economies, provide the people with a means of earning a living other than by clearing the forest, and alleviate poverty. Avoided deforestation is focused especially on tropical rainforests.
Principles and objectives
As expressed by the Avoided Deforestation Partners organization, given the importance and the scale of the global climate problem, avoiding deforestation requires considerable private sector funding and the use of market and non-market mechanisms. The policies adopted by governments around the world and in international protocols and treaties should provide for real and verifiable reductions in greenhouse gas emissions. And this must be done in a practical way, respecting the rights of indigenous peoples and other communities that depend on the forests, and providing incentives for governments and the private sector.
As reported by Ben Block of the Worldwatch Institute, Brazil’s President Luiz Inancio Lula de Silva set up the Amazon Fund in 2008 to attract $21 billion in donations from industrialized countries. These donations would support Brazil’s efforts to reduce deforestation 70 percent by the year 2018, through tougher enforcement of logging restrictions and the reform of land title law.
Norway has offered $1 billion to the Amazon Fund, and other European countries have expressed interest. This fund does not give carbon credits to the donors. Leaders from around the world have been encouraging Washington to get the U.S. to participate in international forest preservation projects. Ben Block reports that Nicholas Stern, an economist from the London School of Economics and formerly of the World Bank, is one of them. Stern has indicated that contributing to the fund would be good for development and good for climate change, and that donations should be made to the fund regardless of whether carbon credits are granted.
International climate agreements
The policy known as Reduced Emissions from Deforestation and Forest Degradation (REDD) could form part of international climate agreements. The United Nations Environment Programme indicates that avoided deforestation has become a hot topic in recent years, and although it was rejected as an emission reduction option under the Kyoto Protocol’s first period Clean Development Mechanism, it could be part of future negotiations. A number of proposals have been developed and avoided deforestation projects have been launched on three continents. The next major round of negotiations is the U.N. Climate Change Conference in Copenhagen scheduled for December 2009.
The business of carbon credits
Private sector actions in the carbon credits market have begun to develop. In April 2008 Merrill Lynch and the Australian company Carbon Conservation signed an agreement for a commercially financed Avoided Deforestation project in Ulu Masen, Aceh, Indonesia. The deal provides for guaranteed financing of $9 million and a contingent amount based on the volumes and values of the carbon credits that are issued.
According to Merrill Lynch, the benefits from this project include economic development of the local community, the alleviation of poverty, biodiversity conservation and the protection of a number of endangered species. Merrill Lynch offers participants in this voluntary carbon market the opportunity to purchase Climate, Community & Biodiversity Alliance Verified Emission Reductions (VERs). In addition to the Ulu Masen project, Carbon Conservation has completed multimillion-dollar avoided deforestation carbon credit sales to Rio Tinto Aluminum in Australia and is working on other land-use projects in Indonesia.
“About Us” – Avoided Deforestation Partners
Alexandra Walker, “Merrill Lynch & Carbon Conservation Sign First Commercially Financed Avoided Deforestation Agreement” – Merrill Lynch
Ben Block, “”Avoided Deforestation” Plan Gains Support” – Worldwatch Institute
“Guidelines on how to establish an avoided deforestation project” – Mongabay
“Payments on Avoided Deforestation” – United Nations Environment Programme
“Reducing Carbon Emissions from Deforestation in the Ulu Masen Ecosystem, Aceh, Indonesia” – The Climate, Community & Biodiversity Alliance
“Special Policy Focus – Avoided Deforestation with Sustainable Benefits” – ASB